Due to decreasing costs, state and federal tax incentives, and increased evidence and awareness of the correlation between CO2 emissions and climate change, photovoltaic or “solar” power systems are becoming increasingly popular with consumers, businesses and utility companies. A basic solar power system consists of an array of solar panels connected together on one or more strings, a combiner for combining the outputs of the one or more strings, one or more string inverters for converting the combined direct current (DC) output from the strings to alternating current (AC), and a physical interface to AC grid power—typically on the load side of the utility meter, between the meter and the customer's main electrical panel.
The next step in the evolution of solar power system is on-site energy storage. Energy storage is important for a number of reasons. First, it provides a potential source of power when the grid is unavailable (outage). Second, in states and/or countries where the customer is unable to be compensated for sending power back to the grid or is compensated below the retail rate, it allows the customer to store the energy generated during the day—specifically when the solar array is generating the most power—and then consume that power after the sun has set reducing the customer's peak demand. Third, it allows the customer to supply power back to the grid at a time when the grid needs power the most. Localized energy storage can help utilities stabilize the grid by supplying power to enhance demand response, shave demand peaks, and shift loads to times of lower demand. Fourth, it provides a mechanism for storing grid power when demand is lower (i.e., when there is a surplus of power), smoothing utility companies' power demand curve from the bottom up. Fifth, by enabling customers to store energy onsite, it may be possible to bill customers for energy supplied to back-up loads when the grid is unavailable (e.g., during an outage).